South Africa’s telecoms industry is heading into a pricing shakeup, and it’s being driven by one critical lever: interconnect rates. The Independent Communications Authority of South Africa (ICASA) has steadily lowered these fees over the past decade—and they’re not done yet.
With termination rates set to drop as low as 4 cents per minute for mobile and just 1 cent for fixed lines by 2027, we’re looking at the makings of a full-blown “race to zero” on call pricing. But cheap calls aren’t the end of the story—they’re the beginning of a whole new business model.
What Are Interconnect Rates?
Interconnect (or termination) rates are the fees telecom providers charge each other to connect calls across networks. When you call from Vodacom to MTN, for example, Vodacom pays MTN a per-minute fee to terminate the call on its network. Historically, these rates were a major cost component of voice services—often making up the bulk of what consumers and businesses were billed. But that’s changing.
The Fall of the Call
Here’s a quick look at where we’ve been—and where we’re going:
With rates collapsing this low, the cost to deliver a voice call becomes negligible, especially over IP networks where infrastructure is already in place. So what happens when the cost of the core service hits rock bottom?
Expect the Race to Zero
As interconnect charges vanish, providers will have no justification to maintain per-minute call rates. Expect to see:
- Flat-rate voice bundles become the norm.
- Free calls as a throw-in with broadband or mobile data plans.
- Zero-rated internal calls across customer and business ecosystems.
- Voice services bundled with premium “value-added” features to drive actual revenue.
Simply put, voice will become a utility—if not a giveaway.
So Where Will the Money Come From?
When the primary product becomes free, the profit shifts to value-added services—and that’s where the real battleground will be. We’ll likely see the rise of:
- Per-user billing for collaboration suites (think unified comms, conferencing, call recording, analytics).
- Premium service tiers for security, SLAs, or integration.
- AI-enhanced voice tools—transcriptions, sentiment analysis, etc.
- Business mobility and workforce tools bundled with communication layers.
Voice itself will be the trojan horse—the hook to get users onto platforms where the real monetisation happens.
What This Means for Your Business
If you’re a business customer, this shift means two things:
- Your voice costs should be coming down fast. If they’re not, you need to ask your provider why you’re still paying 2020 prices on a 2027 interconnect rate. The savings should be passed on.
- You’ll be sold on services, not minutes. The new game is around value-added offerings. Be clear on what you actually need and what’s just fluff bundled into a shiny dashboard.
And if you’re managing telecoms or IT budgets: watch those value-added services like a hawk. Providers will bundle them in with names like “smart voice hub” or “business suite pro”—and they’ll come with user-based pricing that adds up quickly.
Final Thought: Voice Is No Longer the Product
We’re witnessing the commoditisation of voice in real time. With ICASA driving termination rates into the basement, telcos are being forced to rethink their entire pricing model. The result? Call costs race to zero, while the new frontier becomes who can sell the smartest services around the call. Voice isn’t going away. But it’s not where the money is anymore.
Need a Steady Hand Through the Shake-Up?
This shift brings opportunity—but also confusion, hidden costs, and vendor sales fluff disguised as innovation. That’s where JOLT steps in.
With deep experience in Technology Expense Management, real-time reporting, contract benchmarking, and a no-nonsense approach to cost control, JOLT helps you cut through the noise and stay ahead of the curve.
We’ll help you:
- Benchmark provider rates against the new interconnect reality.
- Unpack “value-added” services to see what’s essential vs. expendable.
- Forecast telecom budgets with real data, not guesswork.
- Avoid paying legacy prices for commoditised services.
Talk to us today. Let’s navigate the future together.
